Ann: Response to Media Article, page-8

Could it be that the rapid growth achieved in the past 18 months is now perceived as detrimental to the business in the current environment given they lend at a fixed rate and borrow at a variable rates? I don’t think they have a hedge in place but am open to correction.

• According to the 3Q22 update, Gross Customer Receivables are now 1.2bn
• The average remaining receivable term increased in the last update to 50 months
• The warehouse facility is 3.95% p.a (+BBSW) with total funding averaging 5% in 1H
• Market rates have rallied 3% over the past 6 months and the RBA is moving the cash rate fast to catch up

A rough calculation, on a 12-month basis appears to blow a 36m (1,200m X 3%) hole in the accounts and wipe out most of the cash profit. This is quite precarious given the business had just 22m equity on the Balance Sheet pre the Soc1 acquisition. Admittedly I just had a quick look so I could be way off and am open to correction by those who understand the business better.